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Two senior officials from Nangarhar province where the clash took place told Reuters that fighting resumed after Pakistani troops attempted to repair a gate damaged in the previous clash.
The clash on Thursday, in the border district of Goshta, drew nationwide condemnation in Afghanistan, and saw protests in the east and in the capital, Kabul.
(Reporting by Rafiq Sherzad Editing by Robert Birsel)
The Hang Seng Index was set to open up 1.2 percent at 22,967.8, its highest since March 12. The China Enterprises Index of the leading Chinese listings in Hong Kong was indicated to start up 1.5 percent.
A unit of Sinopec Group and brokerage China Galaxy Securities are launching Hong Kong IPOs on Monday in which they will seek to raise up to $3.5 billion in total, injecting life into Asia's moribund IPO markets where deal values more than halved in the first quarter of the year.
Last Friday, the Hang Seng Index closed up 0.1 percent at 22,690 points. The China Enterprises Index of the top Chinese listings in Hong Kong rose 0.2 percent. They gained 0.6 and 0.1 percent last week, respectively.
Elsewhere in Asia, South Korea's KOSPI was up 0.7 percent at 0100 GMT. Japan is shut for a public holiday.
FACTORS TO WATCH:
* Galaxy Entertainment Group Ltd said on Sunday it would buy assets in Macau's Cotai from hotel operator and casino marketing firm Get Nice Holdings Ltd for HK$3.25 billion ($419 million).
* At least six energy traders and additional support staff have recently resigned from PetroChina's oil trading operation in Houston, a manager for the company said on Friday.
* Telecom Italia has asked state financing body CDP to buy a stake in its fixed-line network, a source with knowledge of the deal said, in a move that could smooth a tie-up between the Italian firm and Hong Kong's Hutchison Whampoa .
* Hopewell Holdings said its property unit Hopewell Hong Kong Properties Ltd aims to raise HK$6.4 billion net proceeds in global offering to fund capital expenditures of development of Hopewell Centre II and for acquisition and development of property projects.
* Greentown China Holdings Ltd said it planned to issue yuan denominated senior notes raising proceeds to refinance short term debts and to fund capital expenditures.
* Sa Sa International Holdings Ltd said its same stores sales grew 17 percent in Hong Kong and Macau during Labour Day holiday from April 29 to May 1 while retail sales rose 25 percent.
* Peak Sport Products Co Ltd said its same store sales for certain retail outlets for the quarter ended in March remained flat compared with the same quarter in 2012, and the total number of authorised retail outlets in China was 6,358, a net decrease of 125 outlets from the end of 2012.(Reporting by Clement Tan and Donny Kwok Editing by Daniel Magnowski)
* Opposition leader Anwar says result was " fraudulent"
* Support for coalition from ethnic Malays solid, although Chinese shift away (Updates vote count, adds markets reaction, adds analyst quotes, paragraphs 1, 3-4, 15-16)
By Stuart Grudgings and Al-Zaquan Amer Hamzah
KUALA LUMPUR, May 6 (Reuters) - Malaysia's governing coalition extended its half-century rule despite its worst-ever performance in a general election, potentially undermining Prime Minister Najib Razak and exposing growing racial polarisation in the Southeast Asian nation.
Najib, 59, could come under pressure from conservatives in his ruling party for not delivering a stronger majority in Sunday's election despite a robust economy and a $2.6 billion deluge of social handouts to poor families.
The National Front won 133 seats in the 222-member parliament, down from 140 in 2008 and well short of the two-thirds majority that Najib had aimed to capture. The opposition won 89 seats, up from 82 last time.
Kuala Lumpur's stock market could gain on Monday on investor relief that the untested opposition failed to take power, but any optimism could be tempered by the prospect of political uncertainty due to the weak win. The Malaysian ringgit surged to a 10-month high early on Monday.
While support for the ruling coalition from majority ethnic Malays remained solid, ethnic Chinese who make up a quarter of Malaysians continued to desert the National Front, accelerating a trend seen in the previous election.
Ethnic Chinese have turned to the opposition, attracted by its pledge to tackle corruption and end race-based policies favouring ethnic Malays in business, education and housing.
" We will work towards more moderate and accommodative policies for the country," a grim-faced Najib told a news conference after the majority was confirmed. " We have tried our best but other factors have happened ... We didn't get much support from the Chinese for our development plans."
Former Prime Minister Mahathir Mohamad, still a powerful figure in the dominant United Malays National Organisation (UMNO), told Reuters in an interview last year that Najib must improve on the 140 seats won in 2008. Najib could face a leadership challenge from within UMNO later this year as a result of falling short.
ANWAR CRIES FOUL
The National Front also failed to win back the crucial industrial state of Selangor near the capital Kuala Lumpur, which Najib had vowed to achieve.
The three-party opposition alliance led by former deputy prime minister Anwar Ibrahim had been optimistic of a historic victory, buoyed by huge crowds at recent rallies.
But as counting went late into Sunday night, it became clear that the fractious opposition would be unable to unseat one of the world's longest-serving governments and pull off what would have been the biggest election upset in Malaysia's history.
After claiming an improbable early victory, Anwar later said he rejected the result because the Election Commission (EC) had failed to investigate evidence of widespread voter fraud.
" It is an election we consider fraudulent and the EC has failed," he said.
The National Front has significant advantages, including its deep pockets, control of mainstream media, and an electoral system skewed in its favour.
" The new government does have a credibility deficit at the very moment due to the very tenacious and contentious election process," said Oh Ei Sun, a senior fellow at the S. Rajaratnam School of International Studies in Singapore.
" I think they have to redouble their efforts in rebuilding their trust among the people."
Anwar had accused the coalition of flying up to 40,000 " dubious" voters, including foreigners, across the country to vote in close races. The government says it was merely helping voters get to home towns to vote.
The opposition also lost control of the northern state of Kedah, one of four it had taken over in the 2008 success.
The 2008 result signalled a breakdown in traditional politics as minority ethnic Chinese and ethnic Indians, as well as many majority Malays, rejected the National Front's brand of race-based patronage that has ensured stability but led to corruption and widening inequality.
Ethnic Chinese parties affiliated with the National Front suffered heavy losses in 2008 and were punished by voters again on Sunday. The National Front's ethnic Chinese MCA party won just five seats, down from 15 in 2008, according to the latest count.
That leaves the National Front dominated more than ever by ethnic Malays, who make up about 60 percent of the population, increasing a trend of racial polarisation in the country.
" There needs to be an effort to look back at racial harmony," said Khairy Jamaluddin, the head of UMNO's youth wing and a member of parliament. " We don't want the results to be looked at through a racial lens." (Additional reporting by the Reuters Kuala Lumpur bureau Writing by Stuart Grudgings and Niluksi Koswanage Editing by Jason Szep and Paul Tait)
The Chinese Are Freaking Out About A Sudden Drop In Housing Prices
ASK ordinary people about their own Chinese dream, and you find owning a home is high on the list.
But years of rising house prices have put that dream out of reach of many. A slowing economy appeared to take some of the heat out.
Now, alas, the residential property market is soaring again (see chart). A new survey of developers and property firms on May 2nd showed average house prices up more than 5% in April on a year earlier.
Taking the long view, rising property values seem defensible. The country is undergoing the largest wave of urbanisation in human history and homes must be built for all of those new city dwellers.
The existing housing stock is poor, so people upgrade to modern homes as soon as they can afford them. Local governments earn a lot of money from land sales to developers and investors have few other places to park their money. All that suggests upward pressure on prices is not going away.
But even if you accept those long-term arguments, says Alistair Thornton of IHS, a consultancy, the market right now looks increasingly as if it is becoming detached from the fundamentals, as speculators looking for an investment swamp buyers looking for somewhere to live. Many flats sit vacant despite legions of prospective buyers desperately seeking affordable housing. Capital Economics, a research firm, estimates that investment in residential property accounted for 8.8% of China’s GDP in 2012.
 The Economist |
China’s new leaders are keenly attuned to such concerns and are trying hard to head off the danger. The ruling State Council and the country’s central bank have issued numerous decrees in recent weeks designed to dampen the market and to crack down on speculation. Among these are larger down-payments and higher mortgage rates for people buying second homes and a reminder to local governments that a 20% capital-gains tax on second-home sales must be enforced.
But plenty of central-government edicts are ignored. The capital-gains tax on resales, for example, was only rarely levied in the past. Ren Zhiqiang, boss of Hua Yuan Real Estate Group, another property giant, recently denounced the country’s policies. The central government’s message to local officials, he claimed, could be described as: " We hope prices won’t continue rising you go and fix them and if you don’t fix them, we will punish you."
Most local officials do not want to implement such curbs with any rigour. On the contrary, encouraging a property boom keeps much-needed tax revenues flowing and puffs up the local economic growth figures on which their chances of promotion hang. This misalignment of incentives, argues Mr Thornton, explains why " it’s always a cat-and-mouse game between local and central authorities" .
Clearing up this mess will be difficult, but not impossible. A good start would be to introduce a property tax, imposed annually, that is based on the market value of a home. That would reduce speculation, discourage owners from holding empty flats and provide a fresh source of funding for cash-strapped local governments. That should reassure officials whose path to the senior ranks of the party is connected to their ability to enrich their districts (and perhaps themselves) along the way.
The perverse incentives the party clings to and the absence of policies to discourage speculation often end up crushing the dreams of would-be home owners. The solution probably starts with the central government recognising that local officials have their dreams, too.
Michael O'Rourke of JonesTrading brought up the indicator yesterday in his nightly note:
We definitely view Initial Claims as a key indicator. I have used the relationship between lower claims and a higher S& P 500 as an indicator for some time now (going back to 2009). Back then I was among the few using it, today its use is commonplace. We believed the relationship would fade as claims approached the pre-crisis constant of 300,000. Since the market is at new highs, however, perhaps we were too quick to discount this indicator. Nonetheless, now that we are within 10% of that pre-crisis constant, we still find it challenging to get too excited.
And here's the chart.
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The median estimate among market economists surveyed by Bloomberg is for 140,000 new nonfarm payrolls, up from last month's dismal 88,000 figure.
Private payrolls are expected to come in at 151,000, implying an 11,000-head reduction in government employment last month.
ADP's monthly employment report released Wednesday estimated that only 119,000 new private payrolls were added in April, well below consensus estimates for a 150,000 print.
On the other hand, we've seen some fantastic improvement in the trend in initial jobless claims over the past few weeks. Thursday's weekly claims release revealed that initial claims fell to 324,000 in the week ended April 27, notching a new post-crisis low.
BofA Merrill Lynch economist Ethan Harris is on the bearish side of the consensus estimate. He thinks the report will reveal that only 125,000 new nonfarm payrolls were created in April. He also expects the headline unemployment rate to tick up to 7.7%.
Why?
The sequester.
Harris writes in a preview of the report:
There are a number of factors potentially influencing non-farm payrolls this month. First, the sequester likely reduced government jobs and weighed on private sector expansion. Although the government did most of its cost cutting through furloughs, we suspect there were also some outright job cuts. We are penciling in a decline of 25,000, but the risk is that this is too conservative.
Moreover, the private sector will likely be impacted. At a minimum, it likely reduced hiring in those industries most closely exposed to the government, such as defense contracting. We think it will ultimately result in outright job cuts, but this may occur with a lag, as suggested by the continued drop in initial jobless claims.
Second, there has been greater-than-normal seasonality in the past two months. March was particularly cold with snowfall in parts of the country, likely curbing economic activity. This would show up in retail and construction jobs in particular, which we think were both held back in March due to the weather.
There is another reason to expect a weak nonfarm payrolls number tomorrow: the April survey only covers four weeks of data, as opposed to the typical five-week window used to conduct the survey.
UBS economists are looking for a below-consensus print of 130,000 nonfarm payrolls, but they attribute it to the shortened time period covered by the April survey.
" The softness in headline payrolls that we forecast reflects technical oddities rather than fundamental weakening," says UBS economist Sam Coffin. " The relatively short interval between March and April payroll surveys, with a four-week rather than five-week gap between them, has historically been associated with April payrolls about 60,000 below the surrounding trend."
Société Générale economist Brian Jones acknowledges this effect in his preview of the Friday jobs report as well, but is decidedly more optimistic: he projects 175,000 new nonfarm payrolls in April and expects the unemployment rate to tick down to 7.5%.
Capping a week of decidedly spotty data, we expect the Bureau of Labor Statistics (BLS) to report that the employment situation in the United States improved further in April. Although once again falling shy of the psychologically important 200,000 mark, nonfarm establishments probably added 175,000 net new workers last month, marginally eclipsing the 168,000 first-quarter average.
Estimated insured unemployment statistics, meanwhile, suggest that the civilian jobless rate remained on a downtrend during the month just passed, moving one tick lower to 71⁄ 2% –the lowest reading since the end of 2008. The remaining key establishment survey metrics are projected to be mixed in Friday’s report. Average hourly earnings likely quickened, rising by 0.2% following no change in the preceding month. The mean work span of private employees probably shortened to 34.5 hours.In his preview, Jones writes: